Bipartisan Budget Draws Lawmaker Ire Before Deal Is Reached

An emerging budget deal could fall apart amid opposition from Republicans who don’t trust plans for future savings and Democrats who say it punishes federal workers by requiring they contribute more to pension plans.

Representative Steny Hoyer, the No. 2 Democrat in the House, said he’s concerned about the compromise.

“I don’t like the deal I’ve heard about but there is no deal,” Hoyer said today on CNBC. “Nobody knows what the parameters of an alleged agreement or deal is.”

Lawmakers are seeking to ease the $100 billion to $200 billion in automatic spending cuts known as sequestration, which includes reductions in defense funding. An agreement would mark a reprieve in three years of fiscal standoffs and, if Congress passes it, would stave off the risk of another government shutdown for at least a year or two.

Representative Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee, yesterday gave the negotiating team just 50-50 odds of reaching a deal that can pass both chambers.

“There are lots of things that are still up in the air as part of this negotiation,” Van Hollen said yesterday on MSNBC television.

Representative Paul Ryan of Wisconsin and Senator Patty Murray of Washington, lead negotiators on the special budget panel, are racing against lawmakers’ self-imposed Dec. 13 deadline to reach a deal. House Speaker John Boehner of Ohio has said the lack of an agreement won’t alter his plan to adjourn this week for a holiday break.

30 Republicans

Amid increasing skepticism, Murray and Ryan are pushing ahead and the outlines of their accord could be presented to party caucuses this week, according to two Republican aides who requested anonymity to discuss private talks.

At least 30 House Republicans oppose any deal that trades the scheduled spending cuts for future savings that may fail to materialize. House Democrats are fighting proposals to increase employee contributions to their pension plans, a pillar of the emerging compromise.

As of today, negotiators had yet to reach a final budget deal, according to an aide close to the talks who asked for anonymity.

To increase chances any accord would pass a divided Congress, Republican Ryan and Democrat Murray have set aside the most contentious budget options, which also would yield the greatest savings: higher taxes for corporations that Republican oppose and cuts in entitlement programs such as Medicare that Democrats have vowed to block.

$4 Trillion

The pair aims to save the government $65 billion, a sliver of the $1 trillion to $4 trillion budget agreement Congress and the president have tried to reach since 2010. Reducing the savings goal hasn’t discouraged opposition.

The panel’s deadline was set as part of a deal ending a 16- day government shutdown in October. Without an agreement this week, Congress may stall action on spending legislation until closer to Jan. 15, when the government again faces running out of funds.

A spending deal wouldn’t slow the growth of the national debt or alter tax breaks Democrats targeted for elimination. The accord also wouldn’t fully replace the automatic cuts, a goal when the panel began its work.

If Ryan and Murray come up short of an agreement, Boehner could set a vote for a stopgap spending plan that keeps funding at current levels -- Pentagon cuts and all. While a bill could be introduced this week, a Republican aide yesterday said that the measure may not be offered until after the year-end holiday break.

Unemployment Aid

Democrats including Hoyer are demanding that Republicans agree to renew expiring unemployment insurance benefits for 1.3 million Americans, either in a deal or in tandem with an accord.

Senator Sherrod Brown of Ohio and 31 Democrats in a letter yesterday urged support for a bill that would extend the expanded benefits, calling the assistance “a lifeline to millions of Americans as they search for work in this challenging economy.”

Democrats who will be in charge of rounding up votes to pass a budget plan include Van Hollen and Hoyer, who are from Maryland districts that are home to many federal workers who oppose the pensionprovision. This was included as President Barack Obama proposed a $20 billion cut to pension costs in his budget blueprint.

Van Hollen called the measure “absolutely” a dealbreaker.

Federal Employees

“There’s no reason that federal employees should take it on the chin as part of this agreement when federal employees have disproportionately contributed to the deficit reduction efforts to date,” Van Hollen said yesterday on MSNBC.

Budget negotiators also are discussing whether to start requiring members of the military to pay into their pension plan, according to the Republican aides.

The potential deal also faces peril from Republicans.

A letter signed by 30 lawmakers including Representative Mick Mulvaney, a South Carolina Republican, to be sent to House leaders criticizes the negotiators’ emphasis on pushing off cuts to future years, echoing concerns of many Senate Republicans, said an aide close to the discussions who requested anonymity.

Republicans pleased that Congress has cut spending for two years in a row are loath to undo that progress, the aide said.

Heritage Action for America, a group that tracks lawmaker votes and is affiliated with the Heritage Foundation that backs limited government, said it opposed short-term spending above the sequestration levels in return for future savings.

Effective Tool’

“While imperfect, the sequester has proven to be an effective tool in forcing Congress to reduce discretionary spending,” according to a statement from the Washington-based group. “A gimmicky, spend-now-cut-later deal will take our nation in the wrong direction.”

Americans for Prosperity, an Arlington, Virginia-based group that says it backs individual freedom and smaller government, today urged Republicans to “stand firm” on spending cuts approved two years ago.

“Otherwise, congressional Republicans are joining liberal Democrats in breaking their word to the American people to finally begin reining in government overspending that has left us over $17 trillion in debt,” according to a statement. “Politicians choosing to go back on their promise will be held accountable for their actions.”

In an interview, Mulvaney said Republicans might be willing to delay the scheduled cuts if they were replaced by structural changes in entitlement programs, a step Democrats vow to block as part of a limited deal.

Soften Blow

Some of the savings would be used to soften the blow of $19 billion in cuts scheduled to hit the Pentagon in January.

The combined Democratic and Republican opposition puts any accord at risk of falling short of the votes to pass, said Ed Lorenzen, a senior adviser to the Committee for a Responsible Budget, which advocates for fiscal responsibility.

The deal would temporarily increase spending in 2014 while scheduling deeper cuts in future years.

“The initial thought was they’d lose a lot of Republicans because there’s going to be more money coming into the government, but you’d make it up with Democrats,” Lorenzen said. “But the amount of the deal isn’t enough to get Democrats excited and it hits federal employees.”

The options Murray and Ryan are considering include raising the fees paid by airline passengers, or boosting the so-called Sept. 11 security fee on airline tickets. Budget experts estimate adjusting airline fees could generate as much as $11 billion to offset some automatic cuts.

Another item that could be part of a deal is auctioning government-owned airwaves. Ryan has previously shared with Republican lawmakers ideas including increased premiums for pension plans backed by the Pension Benefit Guaranty Corp. and a cut in Medicaid payments to hospitals.